Trade War with China is Good for US — If We Win

By JOEL D. JOSEPH

In 1972 we did not trade with China at all. Unemployment was at a low 5.2% and the GDP growth rate was 5.3%. In 1973, unemployment went down to 4.9%, while the GDP growth expanded to a robust 5.6%. There was a small trade deficit with the world in 1972 and a small trade surplus in 1973. Since that time, China has taken five million manufacturing jobs away from the United States. Trade with China has impoverished American blue-collar workers while raising living standards in China. This trade has become a one-way street leading to the decline of the United States.

Expanding Trade with China did not Lead to Democratization

Nobel-prize winning economist Milton Friedman wrote in “Capitalism and Freedom,” “[T]he kind of economic organization that provides economic freedom directly, namely, competitive capitalism, also promotes political freedom, because it separates economic power from political power and in this way enables the one to offset the other.” Similarly, President George W. Bush made the same point about China: “I believe a whiff of freedom in the marketplace will cause there to be more demand for democracy.” Both President Bush and Milton Friedman were wrong: The last 20 years has clearly demonstrated that China is not more democratic now. China is now trying to strangle freedom in Hong Kong and put down protests there.

The US Economy is Too Entangled with China’s Economy

China became a member of the World Trade Organization (WTO) in December, 2001. The admission of China to the WTO signified China’s deeper integration into the world economy. Now China supplies the US with more products and components than ever: auto parts, laptop computers, iPhones, shoes, clothing and toys. It is difficult to go into a retail store in the US and find products not made in China.

Soviet dictator Vladimir Lenin wrote, “When it comes time to hang the capitalists, they will vie with each other for the rope contract.” The same principle is strangling the US in China: capitalists have moved five million jobs from the US to China, cutting their own throats to save a few bucks.

Unbelievably, the US Defense Department is now importing Chinese rocket fuel for Hellfire missiles. This not only weakens the US economy, it directly threatens our national defense. The AGM-114 Hellfire is an air-to-surface missile developed primarily for anti-armor use.

The US is completely dependent on a single Chinese company for the chemical needed to produce the solid rocket fuel used to propel Hellfire missiles (1,2,4 Butanetriol). As current US supplies diminish, our military will be dependent on China to maintain this missile system. Hellfire missiles are a critical component in America’s arsenal. Common sense dictates, “Thou Shall Not Rely on China for Weaponry.” Retired Brigadier General John Adams wrote a report recently titled, “Remaking American Security: Supply Chain Vulnerabilities & National Security Risks Across the US Defense Industrial Base.” In this report, General Adams said, “America’s vulnerability today is frightening. This report is a wake-up call for America to pay attention to the growing threat posed by the steady deterioration of our defense industrial base. Excessive and unwise outsourcing of American manufacturing to other nations weakens America’s military capability.”

Importing these crucial products also violates principles of common sense that we should not be reliant on supplies from countries that may be in a shooting war against the US or our allies. Let’s put common sense and independence back into the Pentagon’s thinking.

Huawei

The Wall Street Journal reported, “Huawei Technologies Co., the world’s largest telecommunications company, dominates African markets where it has sold security tools that governments use for digital surveillance and censorship. But Huawei employees have provided other services not disclosed publicly. Technicians from the Chinese powerhouse have, in at least two cases, personally helped African governments spy on their political opponents, including intercepting their encrypted communications and social media, and using cell data to track their whereabouts, according to senior security officials working directly with the Huawei employees in these countries.” Huawei is controlled by the Chinese Communist Party and cannot be trusted.

5G technology, the latest cellphone technology is a new front in the trade war with China. It pits Chinese controlled Huawei against US technology companies like Qualcomm.

The Positive Effects of the Trade War

We have been in a trade war with China for 20 years. However, the American government and most people did not realize that we were in a trade war. We believed, wrongly, that free trade with China was good for the US economy and that free trade would democratize the Middle Kingdom. Now that Apple Computers is aware that assembling iPhones in China makes it vulnerable to tariffs, it should move production to the US. The company that assembles these phones in China, Foxconn, is currently building a large assembly facility in Wisconsin, so this insourcing can actually take place within a few years. Similarly, the US government and European government must guard against the intrusion of Chinese spyware contained in Huawei 5G equipment. The trade war is waking up Americans who have not realized that our economy is too entwined with the economy of Communist China.

Joel Joseph is a lawyer and chairman of the Made in the USA Foundation, a non-profit organization dedicated to promoting American-made products. Email joeldjoseph@gmail.com. Phone 310 MADE-USA.

From The Progressive Populist, September 15, 2019

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